Impact of Market Environment on Lay's Company

The action of corporation in their market environment and the significance of the global factors that form nationwide business activities

  • Papia Hasan Popy

Executive Summary

This report is dependant on different types of business information and the issues and constraints within the organization.

Name of firm: Lay's

Chapter 1: Introduction

Lay's is a name of your potato chips created from Canadian spuds. The owner of the business is Herman W. Lay. He first started out producing poker chips in his machines then he finally designed potato in chips with flavors. Lay's was then first snack to be promoted on Television set till 1944. Soon it became so popular snack foods in all over Canada. And by 1977 Lay's became the most preferable chip brands and dominating over the market. Because of its flavor and preference Lay's many people love Lay's. They essentially create and produce different flavours of poker chips and have able to create their brand value.

Chapter 2: History of the Study

2. 1: Purpose of the study

2. 1. 1: Extensive objective

  • The behaviour of organizations in their market environment.
  • The significance of the global factors that form national business activities.

2. 1. 2: Specific objective

  • How market structure determine the prices and productivity decision of business
  • The way in which market forces condition organizational responses.
  • How the business enterprise and cultural surroundings shape the action of your organization
  • Significance of international trade.
  • The impact of global factors on business organization.
  • The impact of regulations of the international trading communities on business business.

2. 2: Methodology

2. 2. 1: Part of study

The current situation of Bangladesh.

2. 2. 2: Resources of data

Website, Outlets, Catalogs, Leaflet and Newsletter.

2. 3: Constraints of study

  • Communication distance.
  • Intolerable traffic jam made issue.
  • Network inability while working with net.

Chapter 3: Evaluation and Findings

Task 8: (LO 3. 1) Clarify how market constructions determine the rates and end result decision of the business.

Market composition: It is determined by the number of potential buyers and suppliers to be able to run a small business.

Types of market framework:

  • Perfect competition
  • Pure monopoly
  • Monopolistic competition
  • Oligopoly

Perfect competition: In such a competition there are numerous buyers and many vendors. The merchandise are similarly and entry and leave is very easy. If the purchase price is increased then consumer will proceed to another product if the price is extremely high as output will depend on buyer's demand. Lay's is providing different flavors of poker chips and their competitors are Sun chips, Alooz and Pringles.

Pure monopoly: Only one owner who dominate the whole market. They usually fee high price as there is absolutely no competitor and spend a whole lot on branding and R and D. But this isn't relevant for Lay's as there are many competitors are available in the market.

Monopolistic competition: There are lots of retailers but market is dominated by few. Brand commitment has a competitive advantage and organizations are affected by Opponents. Lay's product is varies in flavors but all products are potato chips and the price is reasonable. The output will depend on the demand of the merchandise.

Oligopoly: There are lots of purchasers but few vendors. Huge capital needed so entry and leave is very difficult and each seller controls a particular portion of the market. Price and productivity is damaged by challengers. Lay's does not follow this.

Task 9: (LO 3. 2) Illustrate (with example) how market forces shape organizational replies.

I have chosen Lay's to describe the form of market causes.

Demand: Willingness to buy a product and will depend on desire and affordability. It really is affected scheduled to price, income level, alternative product and competition.

Elasticity of demand: How flexible the demand is. If price rises then demand diminishes and vice-versa. If income level remains unchanged and price rises then demand reduces but if income level rises then demand is secure.

Lay's is an elastic product so they need to keep their price stable because substitute products like Alooz and Sunlight chips are available in the market as well as are the opponents of Lay's. If the price of Lay's rises then customers will transition to Alooz.

Supply: The amount of commodities on the market and will depend on profit. It is influenced by price of recycleables, technology, approach, labor cost etc.

Elasticity of source: If price rises then supply rises and vice-versa.

Lay's should not take the chance to increase their price. If price escalates the sales may lowers as alternative products are available in the market. They have to keep the price stable and provide steady supply of products if not they might lose customers and their sales.

Task 10: (LO 3. 3) Judge the way the business and ethnic environment shape the behaviour of the organization

Business environment consists of factors that have an effect on the business and its own activities.

There are few factors which affects business environment
  • Political Factors
  • Legal Factors
  • Economic Factors
  • Social and Ethnical Factors etc.
But I am going to focus on social and social factors such as
  • Demographic and Population
  • Household and Families
  • Attitudes to work
  • Religion
  • Nationalism
  • Attitudes to male and feminine roles
  • Ethics etc.

Demographic and Population: The population of Bangladesh is about 18 cores approximately so more labor is available for work and addititionally there is an increase popular for goods. Lay's have better possibility to do business here as a result of large population making available of labors and potential buyers.

Household and Families: More recently there are huge number of joint young families compared to single people. So buying action will be more for joint households.

Attitudes to work: The working environment inside the manufacturer of Lay's is friendly and women are participating there in good sized quantities.

Religion: A lot of people of Bangladesh are Muslims. So Lay's should supply halal products.

Nationalism: In Bangladesh nationalism is less as people are purchasing more brought in product then their Country's product.

Attitudes to male and female roles: Now a days men and women are working jointly in the same environment.

Ethics - Lay's does business ethically.

Political factors: decision considered by federal about the general public costs and taking fees. This involves the political stableness of your country which favors business. Sometimes authorities gives grant, subsidy and lending options on low interest levels for the introduction of an enterprise. They keep up with the infrastructure of an country thus developing communication links.

Enhancing skills of people: More recently education and classes are available to make society skilled in their desired field. This can increase the efficiency of labors which will favour business for Lay's.

Task 11: (LO 4. 1) Discuss the importance of international trade to the organization

International trade: Conducting business beyond the restrictions of any country.

International trade is important for expansion of business and increasing earnings. To obtain resources and to reduce cost international trade is important. It generates an identity far away and also get tax advantage.

Lay's does international business.

Global Business: Lay's is also doing global business. They have production plants in different countries of the world. Now they need their production place in Bangladesh.

Multinational Company: Lay's is having their procedure across the globe

Micro Multi-National Companies: Companies doing business through internet and Lay's is not conducting business through internet.

Reasons behind increased progress of International Business

Lay's is a Canadian company doing business globally to get scientific advancement, simple and fast marketing communications, creation of trade contracts among countries and Bangladeshi authorities is more liberal to the firms who wish to conduct business here.

Bangladesh is currently developing so Foreign Direct investment is vital for us. It creates job opportunity, GDP progress and exchange of knowledge, technology, strategy, culture etc. Lay's is a overseas company so they are simply investing money in our country.

FDI in Bangladesh

FDI in Bangladesh has some opportunities and risks which include

The opportunities are huge markets, option of labor at low priced, natural resources, low production cost, liberal government and citizens etc. So Lay's may take advantages in Bangladesh.

The dangers are political instability of Bangladesh, lack of infrastructural center, unavailability of some recycleables, lack of skilled human resources and useful management etc. These factors must be observed by Lay's before conducting business in Bangladesh.

Task 12: (LO 4. 2) Analyse the impact of Global factors on the organization

  • Import- Goods and service purchased from other country.
  • Export- Goods and service sold in other country.
  • Free trade- Allowing folks of a country to buy and sale their product according to their want.
  • Exchange rate- Price of one country currency in term of other country money.
  • Protectionism- Establishing artificial hurdle to discourage overseas trade to conserve the eye of local industry.

Barriers to trade are three types.

  • Natural Barriers
  • Tariff barrier
  • Non-tariff barrier

Natural barrier- Natural things include distance, vocabulary, social system, legal system and culture and government does not have any control upon this hurdle. As Lay's is a multinational company they want good infrastructure like proper distance path to supply their product and service to customer without it Lay's will never be able to reach their products to customers which results in burning off customers. Proper language should be utilized inside the organization and with the client in order to keep good marriage. If employee will not serve with proper terms with customers and staff, they will neglect to earn customer aim and company objective too.

Tariff barriers- It really is imposed by government which makes brought in goods costly it impact Lay's a great deal because they're multinational company and they import huge amount of product from various countries. If the cost is high they might unable to bring the sufficient amount of products in Bangladesh and it'll impact their position in their market. Due to high cost less product comes to customers so inclination of using brought in product is infected. It also reduces competition from foreign product.

Non-tariff Barriers- It really is imposed by administration other than tax/duty/Levy.

  • Quota - A limit on number for several goods that may be brought in. If Lay's do not transfer the quantity of product they want for customers demand they would unable to serve people that may have a great impact on.
  • Embargo - Complete ban against importing from exporting to certain country. Lay's cannot supply their product to prospects countries where embargo is given.
  • Customer regulation - Make the entry hand for foreign product.

Dumping: Retailing product at an extremely good deal to out-perform competitor in order to fully capture new market. This is resist by Anti-Dumping legislations set by authorities to protect local market sectors.

Task 13: (LO 4. 3) Measure the impact of regulations of international trading areas on the business.

International trading creates international links among countries which is good for business.

International Trading Neighborhoods include SAARC, G8, BIMSTEC etc.

If Bangladesh did not be a part of the international trading neighborhoods it will influence Bangladesh and Lay's will never be able to conduct business. There will be no free trade on the list of person in the countries. The taxes responsibilities will be high and the merchandise price will be high consequently there will be less demand and offer of international products, that may influence Lay's. Protectionism will be increased. Exchange of raw materials will be less. so there will be less creation of Lay's that may create bad impact in the culture. Exchange of culture and worth will be hampered. It'll mainly affect Bangladesh as they will lose their neighbour as well as their supporting opportunity.

Task 14: Give a decision whether business environment of Bangladesh is favourable for starting the operation/ manufacturing vegetable/ showroom/ branches of the business or not. Give proper justification behind your decision. Do you have any suggestion regarding these issues?

Lay's can begin their procedures in Bangladesh because potatoes are stated in Bangladesh in large volumes. They can get labors at low priced and tax edge as Bangladesh government is liberal to overseas investors. They are able to increase their sales and their brand name in Bangladesh and the political situation is secure now. I'd like to suggest some advice to Lay's before functioning in Bangladesh.

Chapter 4: Recommendation

  • As many substitutes are available in the marketplace so they need to concentrate on quality.
  • They must focus on price because Alooz is charging Tk 15 for each while Lay's is charging Tk. 30 for each and every mini load up.
  • If they don't lower their price they need to provide superior quality product to make their brand image.
  • They also must focus on their pacaging such that it appears attarctive so that customer get affected.
  • They must go for horse cart rally to make people aware about their product.
  • They must offer some short-term incentives to promote their product. Such as for example givng products for children.

Chapter 5: Conclusion

Lay's is without a doubt an established firm that emphasize on keeping quality product and use endorsement in advert for their campaign. Although there are many problems, Lay's has very good brand image and customer approval for best value product. They are going for continuous survey for the development of their products and service.


1. Lay's. 1944. Lay's POKER CHIPS | Simply Made. Simply Good. (TM). [ONLINE] Available at: http://www. lays. ca/#/simplygood/. [Seen 15 March 14].

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